In the United States, most have returned home from their various trips after taking advantage of summer’s last hurrah, Labor Day weekend. Now, the demand for gas will likely slip just a bit more as there’s little more than the commute back and forth to work and school. The United States Oil Fund (NYSEARCA:USO) jumped in Tuesday morning’s trading as OPEC+ nations announced continuing cuts in oil production in a bid to shore up prices.
The latest word came from Saudi Arabia, who announced that its production cut of one million barrels per day will extend for the next three months, meaning that production hikes likely won’t be on the table until some time in 2024. That would put production down to around three million barrels per day for the next three months. Meanwhile, Russia also announced plans to keep its own supply cuts running. Russia’s cut won’t be quite as extensive as Saudi Arabia’s, however, with the reduction taking 300,000 barrels per day out of circulation.
A look at the last six trading months for the USO ETF—back to when Russia first cut production—shows a sharp drop, a sharp recovery, another sharp drop to something like a plateau, and then a fairly steady rise to current levels.
